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ARTICLE · 27 MAY 2019

Warranty and indemnity insurance: does it provide value on public M&A transactions?

Corrs Chambers Westgarth
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Warranty and indemnity (W&I) insurance has become a ubiquitous part of negotiated M&A in the Australian market.

AustraliaInsurance
Gaynor Tracey
Gaynor Tracey
Madeleine Kulakauskas
Madeleine Kulakauskas
Andrew Lumsden
Andrew Lumsden
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Warranty and indemnity (W&I) insurance has become a ubiquitous part of negotiated M&A in the Australian market through the innovation of insurers, however it is no longer exclusively restricted to private treaty transactions.

W&I insurance, which allows parties in an M&A transaction to reduce the seller's liability for warranties given under a sale agreement, has 'tip toed' into listed company M&A. Over the last 10 years, there has been a slow trickle of listed company 'scheme of arrangement' transactions where acquirers have been able to obtain cover. However, continuing the spirit of innovation, insurers have increasingly branched out to provide cover for acquirers beyond schemes of arrangement.

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